Trading Goods for Lives: NAFTA’s Mortality Impacts and Implications

Why It Matters

The findings imply trade liberalization can have substantial, localized public-health costs when it disproportionately hits manufacturing, underscoring the need for targeted labor-market and health interventions to offset the social consequences of trade shocks.

Summary

Using county-level mortality data and a research design that exploits spatial variation in local labor-market exposure, Matt Notto and co-authors find that NAFTA increased mortality in U.S. communities most exposed to import competition. The paper shows a clear industry pattern: declines in manufacturing employment raised mortality, while declines in non-manufacturing employment reduced it. The authors compare NAFTA’s effects with other shocks (the Great Recession and rising China import competition) and argue that heterogeneity in mortality responses is driven by how concentrated shocks are in manufacturing. Methods include OLS and instrumental-variable estimates using employment-to-population variation across local labor markets.

Original Description

Free trade agreements are typically evaluated on their economic gains, but what about their costs in human lives? In this talk, Professor Matthew Notowidigdo will present his recent research with Amy Finkelstein (MIT) and Steven Shi (MIT) examining the mortality consequences of local labor market exposure to the 1994 North American Free Trade Agreement.

In parts of the US where workers faced heavier competition from Mexican imports after NAFTA, residents were more likely to die in the 15 years after the deal took effect. Over this same period, areas with average exposure saw death rates increase by 0.68 percent annually — large enough to more than offset the agreement’s estimated nationwide welfare gains. Death rates rose across age and sex groups, but working-age men, who lost manufacturing jobs at the highest rate, saw the largest increases.

More broadly, the authors find that when job losses are concentrated in manufacturing, residents are more likely to die, while when they fall in other sectors, death rates tend to fall.

🔗 Related Links

For more on the event, visit: https://bfi.uchicago.edu/events/event/trading-goods-for-lives-naftas-mortality-impacts-and-implications/?occurrence_id=764

Trading Goods for Lives: NAFTA’s Mortality Impacts and Implications Research Brief: https://bfi.uchicago.edu/insights/trading-goods-for-lives-naftas-mortality-impacts-and-implications/

Trading Goods for Lives: NAFTA’s Mortality Impacts and Implications Working Paper: https://bfi.uchicago.edu/working-papers/trading-goods-for-lives-naftas-mortality-impacts-and-implications/